The Swiss bank UBS set out a tough new pay system yesterday for its top executives that could see senior bankers "fined" or forced to repay part of their bonuses if they under-perform in years of hefty losses.

Proclaiming the end of the era of excessive bonuses in the global financial sector, Peter Kurer, the bank's chairman, who is paid a fixed annual salary of 2m Swiss francs (£1.1m), said the new system would eradicate the culture of paying out multimillion bonuses and stock options on short-term results and rewarding excessive risk-taking.

The proposed cultural shift would see rewards for "those who deliver good results over several years without assuming unnecessarily high risk," he added.

His comments came as Goldman Sachs, the US bank renowned for its huge Christmas payouts, said its seven top executives would get no bonus for 2008. Top executives at Deutsche Bank, Germany's biggest, have already waived their bonuses.

UBS also scrapped boardroom bonuses, and said the payout pool for its once high-flying bankers and traders would be slashed this year after it wrote down almost $50bn of toxic assets and accepted a Sfr6bn rescue from the Swiss authorities.

The bank's new self-styled "bonus-malus" compensation model is viewed as a precursor for schemes likely to be imposed on banks and other finance houses by governments and regulators around the globe. Political leaders accuse bankers of taking out huge bets on complex financial instruments from September each year in order to maximise their Christmas bonus - and of creating the worst financial crisis for more than 70 years in the process.

Kurer told journalists UBS was in talks with lawyers about clawing back tens of millions of francs in unwarranted bonuses for former board members and top executives. Peter Wuffli, an ex-chief executive, has already agreed to forfeit a Sfr12m pay-out. Huw Jenkins, the former investment bank chief, and Clive Standish, UBS's ex-chief financial officer, are also being pressured by UBS to pay back at least some of their multimillion payouts. The trio shared Sfr33m in payoffs last year.

Kurer said: "I've said I would welcome voluntary repayments and we have seen the first results of this. We're holding talks with others and I assume these talks will bring further results." The bank's former chairman, Marcel Ospel, the alleged architect of UBS's demise, is under substantial pressure to surrender previous bonuses.

UBS's new pay model will take effect next year, if approved by shareholders next week. It applies to all "risk-takers" among the bank's global staff. Under the proposals, Kurer will be paid only a fixed salary in cash and a fixed number of shares that he will have to hold on to for four years. Executive directors will be paid a fixed salary, but will also receive variable cash bonuses and stocks. However, most of this variable component will be held back and fully paid only if UBS makes good profits in future years. In loss-making years there will be no payouts.

Under the proposed "bonus-malus" system, senior managers will only get a maximum one-third of their cash bonus. The rest will be paid into an escrow account and clawed back if the bank makes a loss in a subsequent year.

Kurer also insisted that UBS would not award "golden parachutes" to departing executives and would cut the dismissal notice from 12 to six months.

The new pay model aims to help the Swiss bank recover its reputation for prudence after years of reckless risk-taking. But the world's leading wealth manager is still seeing hundreds of its richest clients withdraw their funds, with more than $80bn taken out in the third quarter.